FINRA Rule 2090

Securities Fraud Attorney Assisting Investors in the Los Angeles Region

The investment realm is one of the most heavily regulated fields in the United States. There are numerous rules and regulations that brokers and brokerage firms must follow when going about their operations. Many of these rules are designed to promote fairness, equity, and transparency for investors and other brokers, but all too often financial advisers abuse a client’s trust and engage in careless or intentionally wrongful management of an investor’s portfolio. One of the key rules in this area is FINRA Rule 2090, which imposes certain obligations on financial professionals. At the Law Offices of Steve A. Buchwalter, our Los Angeles securities fraud lawyer has substantial experience in this area and knows what it takes to help you pursue the settlement or the judgment that you deserve after being burned by your broker.

Understanding the Obligations Imposed by FINRA Rule 2090

The Financial Industry Regulation Authority is a nonprofit organization that was authorized by Congress to help protect investors in the United States from fraudulent or negligent treatment by brokers and brokerage firms. FINRA is also subject to oversight by the Securities and Exchange Commission. Of the many FINRA rules and regulations, Rule 2090 is critical when it comes to ensuring that investors are treated with appropriate care and candor by their brokers. According to its terms, brokerage firms must exercise reasonable diligence when opening and maintaining each account. This includes ascertaining any essential facts regarding each customer and regarding the authority of each individual acting on behalf of that customer. Essential facts include information and other things that are required in order for the brokerage firm to service the customer’s account effectively and to act in accordance with any special handling provisions that the customer has provided. Additionally, the concept of ascertaining essential facts includes obtaining information about who is authorized to make decisions regarding the account. An example of ascertaining essential facts is learning about the customer’s investment objectives. FINRA Rule 2090’s obligation to “know the customer” is initiated immediately upon the customer’s decision to open the account, regardless of whether any broker has provided financial recommendations or suggestions to the customer. There are also ancillary rules that require brokerage firms to update the customer’s essential facts on a regular basis.

Seek Damages after Suffering Losses Due to Broker Negligence

California law allows investors to seek compensation from brokers and brokerage firms that handle their accounts negligently or that use intentional fraud or deceit for the purpose of increasing their own financial gain. Since brokers have sophisticated knowledge compared to most laypersons and common investors, the law imposes the highest level of care on a broker’s relationship with an investor client.

If the broker fails to adhere to that duty of care, such as by failing to carry out the investor’s wishes, taking unauthorized actions on the investor’s account, or misleading the investor, the investor is entitled to receive the difference between the actual value of the account after the negligence or wrongdoing and the estimated value that the account would have contained had the broker adhered to their duty of care.

Contact an Experienced Securities Attorney in Los Angeles or Surrounding Areas

Regardless of how complex your financial situation may be, the experienced and dedicated staff at the Law Offices of Steve A. Buchwalter is prepared to help you assert your rights after being harmed by broker fraud or negligence. Our broker negligence attorney has substantial experience in the securities field, providing him with the experience and insight that it takes to bring a strong claim. We have handled a wide variety of securities and investment-related matters on behalf of people in Los Angeles, Irvine, Pasadena, Santa Barbara, Beverly Hills, and Newport Beach, as well as other cities in Los Angeles, Orange, Ventura, and surrounding counties. We offer a free consultation to help you learn about your legal options and how we may be able to assist you. Call us or contact us online to set up your appointment with a securities lawyer.